Disclosed is a novel apparatus and method for volumetric dilatometry. A volumetric dilatometer includes an optical displacement sensor and a means for using a gap measurement obtained from the displacement sensor application in an application which requires the measurement of absolute distance and/or displacement. A novel signal-processing algorithm for volumetric dilatometry is also disclosed. The signal-processing algorithm includes a step for recovering the phase information from a spectral signal by taking the Fourier transform of a spectral signal and deriving a sensor gap measurement from the phase information. A micro-translation stage is provided for automated positioning of the optical sensor and automated re-leveling in an out-of-range condition. A heat source is consists of a vertical tube furnace, such as those found in drywell technologies. Further disclosed is a novel sealed-cell design which consists of a mercury reservoir, a sample cell capable of locking onto the bottom of the mercury reservoir and an outer reservoir sleeve for sensor-to-cell alignment during sensor positioning.